Office of the Historian

893.516/5–1349: Telegram

The Secretary of State to the Minister-Counselor of Embassy in China (Clark), at Canton

Washington, May 13, 1949—1 p. m.

TelCan 167. National City Bank has approached Dept re problem of possible conflicting claims by Nationalists and successor regimes for control of govt and quasi-official funds on deposit American banks. Dept has informally advised NCB of reluctance to freeze Chinese accounts but of willingness receive requests for certification Central Bank and other official accounts under Section 25B Federal Reserve Act.74 NCB attorneys believe Chinese might well refuse request certification since, in absence certification, if NCB refused pay out on order, Chinese probably could get summary court judgment release funds. Moreover, Chi Govt probably apprehensive possible future restrictions under certification procedure. NCB believes Chinese have taken steps to terminate authority Central Bank branch Nanking to operate official accounts with NCB. NCB lawyers appear believe best legal protection for Amer banks obtained through some form of freezing by Treas under Trading Enemy Act.75 Your comments incl those of Treas rep and any additional info without alarming local authorities requested by 10 a. m. Wash time May 17.

Acheson
  1. Approved December 23, 1913; 38 Stat. 251. The Section 25(b) procedure was established under P.L. 31, approved April 7, 1941; 55 Stat. 131.↩
  2. Approved October 6, 1917; 40 Stat. 411.↩